In today’s briefing:
- Toshiba (6502) – Funding Secured!
- 2023 High Conviction – Anycolor (5032) Aiming at TSE Prime and TOPIX – And How!
- Toshiba (6502 JP): Securing Financing Helps Sentiment but Hurdles Remain
- Premier Anti-Aging Company: DUO Is Going Down
- Tokyo Electron (8035) | Huge Upside if Management Hit Targets
- Fujifilm: An Inspiring Transformation Story
- Askul Q2 23 Results Reaction: B2B Growth and B2C Cost Savings Drive Solid Quarter
- ROIC Helps to Raise Transparency in Business, but Management Skills Are the Key to Improve Return
Toshiba (6502) – Funding Secured!
- A Nikkei article today suggests FUNDING SECURED for JIP’s deal for Toshiba Corp (6502 JP). Noises 2wks ago suggested this timing for a deal, but there are no terms yet.
- The syndicate, led by SMBC and Mizuho, “has agreed to ¥1.2trln in loans.” The two leads take two-thirds but details suggest not all is as smooth as the headline suggests.
- The remaining questions are whether the major holders will take the bait at that price, and/or whether JIC would come in over the top. I expect yes to the first.
2023 High Conviction – Anycolor (5032) Aiming at TSE Prime and TOPIX – And How!
- “VTuber” (Virtual Youtuber) animated influencer company Anycolor (5032 JP) was listed on 8 June 2022 at ¥1530. The stock popped 214% on Day1.It is up another 60% since then.
- Today Anycolor reported Q2 earnings (result, presentation) and revised its full-year forecast to 30 April. Revenues will be +7-18% vs forecast, OP +18-39%, NP +15-39%. Price is 43x forecast EPS.
- The company also announced it is preparing a Section Transfer application, but gave little more info. So we dig into what THAT means.
Toshiba (6502 JP): Securing Financing Helps Sentiment but Hurdles Remain
- The Nikkei reports that Japan Industrial Partners (JIP), the preferred bidder, has secured bank financing of around JPY1.2 trillion (US$8.8 billion), conditional on Toshiba Corp (6502 JP) selling some businesses.
- JIP will table an offer valuing Toshiba at JPY2.2 trillion (US$16 billion). The special committee is assessing the proposal and a final decision will be made at a board meeting.
- JIP’s next challenge is getting the committee to recommend the offer. While a potential offer of JPY5,100 is not terrible, it is well below the original bid expectation of JPY6,000.
Premier Anti-Aging Company: DUO Is Going Down
- Premier Anti-Aging (4934 JP) shares rose 6.1% today following a massive earnings miss and a substantial downgrade to FY23 guidance.
- This is perhaps due to low liquidity and depressed prices as the share price dropped more than 85% since July last year.
- We think there’s more downside to the stock, especially with DUO about to hit the bottom of the barrel and CANADEL and Clayence struggling to maintain growth momentum.
Tokyo Electron (8035) | Huge Upside if Management Hit Targets
- Tokyo Electron is a structural growth stock that has fallen by 31% YTD reflecting near term risks to growth and margins
- We believe that the digitization of society has only just begun and that data volumes will grow exponentially
- We analyse TEL’s core value drivers – revenue, margins, risk and reinvestment – and see 38% upside
Fujifilm: An Inspiring Transformation Story
- Established as a domestic photographic film manufacturing company, Fujifilm has successfully evolved into a healthcare company with majority revenue earned from medical and life science related businesses.
- Fujifilm is now a leading player in Bio CDMO market through a combination of acquisitions and in-house developed capabilities. The company has gained recognition among leading pharmaceutical companies.
- We think there is further upside to Fujifilm’s valuation multiples as the market still values the stock as an image/photography company and not in line with healthcare peers.
Askul Q2 23 Results Reaction: B2B Growth and B2C Cost Savings Drive Solid Quarter
- Results for Q2 were better than we expected as B2B sales growth remained robust whilst cost savings on the consumer side boosted margins
- A rather robust decline in revenue for Lohaco is the only negative that stands out but this was partially anticipated whilst the corresponding cost savings are a boon
- An 11% increase in operating profit for Q2 offsets weakness from the previous report and puts the company on track to meet guidance for full-year growth
ROIC Helps to Raise Transparency in Business, but Management Skills Are the Key to Improve Return
- The important thing is not whether the ROIC tool is used or not, but rather the risk-taking for investment and whether it resulted in sufficient returns.
- A change in the outlook for improving profitability is necessary for the stock price to rise, and furthermore, a compelling growth policy and capital allocation can also be effective.
- The fact that valuations have not risen sufficiently in the current situation infers that investors lack confidence in the path to improving profitability for each business.
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